[290513.EN.SEA] Panama Canal Box Volume Slips As GDP Growth Slows To Two-year Low

EXPENDITURE of the Panama Canal expansion, which has run into delays, has not been matched by the country growth, which slowed for a second consecutive month, Reuters reports.

Fewer containers are arriving at Panamanian ports or traversed the canal in March when GDP expansion hit 5.92 per cent year on year, down from 6.05 per cent in February, the lowest growth rate since March 2011.

Panama has enjoyed double-digit growth for four of the past six years, expanding 10.7 per cent in 2012, but slipping below eight per cent in three months last year.

Maersk and Singapore's Neptune Orient Lines (NOL) have redirected routes through the Suez Canal, resulting in a projected loss of about US$40 million to the Panamanian government this fiscal year, coupled with a 2.4 per cent decline in cargo volume, according to canal administrator Jorge Quijano.

Officials Maersk Line and NOL officials say Suez allows them to nearly double their loads of Asian cargo and get it to the east coast of North America on bigger ships. Suez can accommodate 18,000-TEU ships of any known type while even an expanded Panama Canal is expected to handle 13,000-TEUers if they are shorter and broad of beam.

But Mr Quijano is optimistic: "We don't see more than two services going," he said.

The canal, which transports about five per cent of the world's exports, is undergoing a $5.25 billion expansion, but delays have pushed back the scheduled opening to mid-2015, not soon enough for shipping companies seeking to save money by using bigger vessels.

Source : HKSG.